GM sues to recoup misused worker discounts

Turns out General Motors Corp.'s employee discount isn't for everyone. The automaker, which last week temporarily extended the perk nationally to anyone in a bid to boost sales and clear out inventory, simultaneously filed three lawsuits alleging fraud as the company cracks down on employees, retirees and widows giving discounts to nonrelatives, according to court documents. Along with other recent lawsuits, the automaker is suing for more than $450,000 plus costs and attorney fees.

"What an irony, huh?" lawyer John Pieri said. He represents a retired autoworker in Buffalo, N.Y., who is being sued for $45,501 and accused of giving discounts to 13 people from 2004 until April 2007.

Several retirees and lawyers said the lawsuits are an attempt to raise cash by a financially troubled company that lost $15.5 billion during the second quarter and provide insight into an unconventional way GM is trying to recoup revenue amid the slowest sales climate in more than a decade.

It was unclear Friday how many cases have been filed nationwide and a GM spokesman did not know how often the automaker files such cases. GM's lawyer, Michael Clawson, could not be reached. There have been at least nine cases filed in circuit courts across Metro Detroit in recent months.

The timing of the lawsuits, three of which were filed on or after Aug. 20, the day GM extended the employee discount to everyone, is coincidental, company spokesman Tom Wilkinson said.

"In decades past, GM was so wealthy, I think probably a lot of these types of abuses might have been tolerated," he said. "We're obviously in a competitive situation and you get more focused on watching your costs."

The employee-pricing program, which ends Tuesday, is a perk offered to employees as part of their benefits package. Any eligible employee, retiree or surviving spouse can use the discount to buy or lease six new or used vehicles each year, or extend the discount to relatives. Almost anyone on the family tree is eligible, from children to same-sex partners, in some cases, but GM is accusing the employees of profiting by giving the discount to people who they knew weren't qualified and for their own "financial gain." Detroit News